In Washington, Competing Forces Work to Reform Healthcare Markets

In Washington, news of the latest healthcare reform efforts seem to change by the hour. But it’s been a particularly productive week on the issue, as both Congress and the Administration made moves to implement competing agendas. Here’s a quick recap of what happened:

Calls on the Department of Labor to examine how to expand access to association health plans. Association health plans allow small businesses to more easily join to collectively buy insurance through trade associations. Association health plans can be formed across state lines and could qualify for exemptions for certain Affordable Care Act (ACA) provisions.

Calls on the Departments of Treasury, Labor and Health and Human Services to expand the availability of Shot-Term, Limited Duration health plans. These polies were designed to be a stop-gap coverage and, as such, are less expensive but are limited in their coverage. Currently, they are only available for a duration of three months. The executive order would like to see this expanded to a year. These plans are not covered by ACA regulations.

Calls on the Departments of Treasury, Labor and Health and Human Services to expand the use of health reimbursement accounts (HRAs). HRAs are employer-funded, tax-free set aside to cover health costs for employees such as deductibles and co-pays. The ACA prevents the use of HRAs for the purchase of insurance plans through the individual marketplace. The executive order looks to expand how that money is used, likely reversing the ability to use these funds to pay the premiums for plans in the individual marketplace.

Later that night, the administration filed with a federal appeals court informing them of the Department of Health and Human Services’ decision to stop cost-sharing reduction (CSR) reimbursement payments to insurers.

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CSR payments, available to those earning 250 percent or less of the federal poverty level, have been used to offset the costs of insurance for millions of low-income Americans. The announcement to stop reimbursements for insurers for CSRs comes two weeks before this year’s enrollment period.

The timing of this decision by the Administration could not be worse for low-income Americans living in cities and towns across our country. Failure to provide reimbursements to insurance providers for CSRs means that many insurance companies will back out of the marketplaces that millions of Americans rely on for their healthcare coverage. This move achieves what the failed attempts at healthcare reform in Congress would have had they passed – millions of Americans without access to healthcare coverage and cities left to pick up the pieces.

Following this action, Senators Lamar Alexander (R-TN) and Patty Murray (D-WA) announced today that they have reached a deal to extend the CSR payments to insurers through 2019 and give states more flexibility to apply for waivers to ACA rules, known as Section 1332 waivers. The bill also calls for funding for enrollment activity and expanded eligibility for catastrophic health plans.

This bipartisan bill, which was 24 cosponsors equally divided between Republicans and Democrats, comes on the heels of a months-long effort by Alexander and Murray to craft legislation that will address rising premiums and stabilize marketplaces. While President Trump initially applauded the bill as a short-term fix, he has since voiced his concerns that the bill doesn’t go far enough.

Leader McConnell has yet to indicate when or if he will bring the Alexander-Murray bill to the floor for a vote however Senator Alexander has indicated his belief that it will pass before the end of the year. As the Senate and, ultimately, House leadership decide how to move forward with the Alexander-Murray compromise, city leaders should make sure that their senators and members of congress understand the importance of ensuring that millions of Americans do not lose access to health insurance coverage.

Meanwhile, both the Senate and House are hard at work on reauthorization bills for the Children’s Health Insurance Program (CHIP), which expired at the end of September. The program allows states to provide access to children whose families earn too much to qualify for Medicaid but who also cannot afford private insurance.

Every state has a CHIP program and collectively covered close to 9 million children in 2016. The House and Senate bills would reauthorize the program for five years. There is bipartisan support for the CHIP program however current ACA debates have complicated the conversation as members discuss adding additional provisions to the bill to stabilize markets.

Stephanie Martinez-Ruckman is the Program Director for Human Development at the National League of Cities. Follow Stephanie on Twitter @martinezruckman.